As part of the combined buffer requirements, the Systemic Risk Buffer (SyRB) is a capital requirement that can be flexibly applied in the event of cyclical or structural systemic risks occurring in the banking system as a whole or in some of its segments independently from the other buffers such as the capital conservation buffer, the capital buffer for other systemically important institutions, and the countercyclical capital buffer, which are not targeting or cannot manage the specified risks.
The capital buffer is both suitable for ensuring adequate shock resistance and for counter-incentivizing the exposures and activities targeted by the capital requirement.
Systemic risk buffer for mitigating systemic risk related to commercial real estate project loan exposures
The MNB used the systemic risk buffer for the first time to manage real estate market, concentration and, ultimately, structural risks arising from the non-performance of project loans secured by commercial real estate. Within this framework, a capital buffer rate can be established in a decision for each institution, the amount of which is based on the institution's contribution to systemic risk, specifically for weighted sum of commercial real estate project loan exposures relative to the Pillar I capital requirement.
The purpose of the instrument is to increase the shock absorbing capacity of credit institutions with significant risk exposure (raising capital), as well as to incentivise the cleaning risky exposures (reduction of the risk-weighted exposure amount).
Effects of prescribing the SyRB
Calculation of the systemic risk buffer
SyRB regulatory changes
|1 July 2024||Activation of the modified SyRB and formation of the capital requirement according to the prescribed capital buffer rates|
|16 October 2023 (announcement)||Reactivation of the SyRB with modified conditions of application|
|19 March 2020 (announcement)||The MNB has temporarily suspended the use of the systemic risk capital buffer to mitigate the effects of the coronavirus pandemic.|
|1 January 2020||Third review of SyRB rates based on the new calibration, during which no bank was required to hold a capital buffer.|
|16 September 2019 (announcement)||Determination of a new SyRB calibration, during which, in addition to the domestic problematic commercial real estate project loan portfolio, the domestic currency non-problematic portfolio is also taken into account.|
|1 July 2019||Second review of SyRB rates, during which no bank was required to hold a capital buffer.|
|1 July 2018||First review of SyRB rates and determination of effective capital requirement for a (CIB) bank.|
|1 July 2017||First application of SyRB and determination of effective capital requirement for two (CIB, Raiffeisen) banks.|
|24 October 2016 (announcement)||Postponing the application of the SyRB for half a year in order to support lending, with a capital requirement of July 1, 2017.|
|18 November 2015 (announcement)||The announcement of the application of the SyRB in connection with the problematic commercial real estate project loan exposures, with the announcement of an appropriate preparation and adaptation period, with the requirement of capital requirement of January 1, 2017.|
General conditions of application: General conditions on the formation of the systemic risk buffer (Effective from 21 September 2023)
Related unique resolutions: